Governor Lincoln Chafee’s plan for helping municipalities out of their budget crunch has been the focus of much commentary, since it was released yesterday. Ted Nesi offers an adequate roundup of opinion. The closest observance of the plan’s most stunning quality comes from Bob Plain of RIFuture:

While Ted Nesi notes that former Governor Carcieri offered some of the same mandate exemptions that Chafee proposed yesterday, the big difference is Chafee’s bottom-up approach. Carcieri’s proposal was a blanket exemption to every municipality and Chafee’s is need-based.

Not surprisingly, although pointing toward the notable aspect of the legislation, Plain misses its most significant and detrimental quality (because it’s a quality that he supports). Chafee’s proposal may appear “need-based,” but it takes a technocrat’s view of “need,” at least in terms of the provisions that grant relief from state mandates and contract negotiations. (The section on retiree COLAs is available anywhere a plan is below 60% funded.)

Clearly, in Chafee’s view, local communities can’t be trusted to assess their own needs, because that would be little different from “blanket exemptions” allowing cities and towns to determine what practices they ought to discard. And the state couldn’t possibly write down a threshold of exact dollar amounts and percentages, because who knows but that a municipality could exceed a specific threshold and still limp along; why permit healing where limps are still possible?

The Coveted Bottom Quintile

Painted into this corner, the proposal creates a new class of municipality that is relative to others:

The legislation would designate municipalities “highly distressed communities” if they are ranked in the lowest 20% of all four distressed community criteria:

Percent of tax levy to full value of property

Per capita income

Percent of personal income to full value of property

Per capita full value of property

That list’s repetitive obscurity is the hallmark of criteria backward-engineered so as to include a predetermined group of communities. Wealthy communities with even more exorbitant tax burdens might qualify under #1; wealthy communities with modest housing might qualify under #3 and #4; but criterion #2 sets the limit. It is as if the governor looked at some comparative lists but found no single one that, by itself, roped in the communities he was seeking to capture.

Even so, the criteria are relative, so as “distressed communities” improve, it’s conceivable that their ability to implement the allowable reforms would change from year to year as they leapfrogged their fellow cities and towns into and out of the coveted lowest quintile. One year Woonsocket might qualify, while East Providence doesn’t. And then they’ll switch. Or more, if they each improve by different criteria, several could be in and out of the category at the same time.

The law as it currently stands is somewhat absurd — requiring three of the four criteria to qualify as a regular ol’ “distressed community” — but at least it only enables qualifying communities to request a bonus in their state aid. Chafee’s proposal appears to leave only two possibilities: Either municipalities will have to invalidate newly minted ordinances as they slip out of “HDC” status, or the listed state mandates will apply unevenly across the state, only reaching those cities and towns that have not yet had the good fortune to be distressed.

And all of this leaves aside abstruse questions of political philosophy, such as: Why do only children of non-distressed communities require bus monitors? Or why shouldn’t collective bargaining arbitrators always “consider overall aggregate compensation received by employees, financial impact of awards, and property tax levy” when making awards?

Moving Receivership Up the Ladder

Suppose that RI’s dominoes continue to fall more rapidly than Chafee’s proposal can repair them, leaving many distressed communities that are not yet highly distressed. At least in the summary form in which it has been unveiled, Chafee’s proposal creates a peculiar incentive for communities to enter into the early stages that lead to receivership.

Those that look unlikely to achieve HDC status can still under current law request to be placed under the watchful eye of a fiscal overseer. From there, the community may still not qualify to shed the state mandates laid out in Chafee’s proposal, but they could march toward bankruptcy and more extreme measures.

A more rational approach would be to allow “broad exemptions” so that more mild measures (such as the aforementioned bus monitor elimination) would have a chance of averting catastrophe before it is one empty paycheck away.

In the End, We Just Can’t Be Trusted to Govern Ourselves

What the drive to micromanage local fiscal recovery plans indicates is a fundamental distrust — among state leaders generally and Governor Chafee specifically — of people to govern themselves, or even to elect people to do the job. Nowhere is this more sharply drawn than in the section on the “School Spending Accountability Act”:

The legislation grants new powers to the RI Department of Education (RIDE) to oversee the uniform budget process and to withhold state education aid in cases of noncompliance. RIDE would have the authority to review school district expenses to determine if they are consistent with budgeted amounts. In cases where school district spending exceeds budgeted levels and a deficit is projected, RIDE is required to inform the Office of Municipal Finance, the Office of Auditor General, school superintendent, the chairman of the school committee, the mayor or town manager, and the president of the town council.

When it comes to empowering communities to address their own problems, the governor insists that they be dysfunctional first. Conspicuously, when it comes to increasing the state government’s intimate control, no such thresholds are proposed.

Even beyond the governor’s trust of unelected bureaucrats (a class that has helped to implement and expand upon the mandates and regulations strangling municipalities in the first place) take careful note of who is not required to be notified: the residents of the town or city in question. One suspects that a bright-red mailer to every address in town reading, “WARNING: Your school department is spending more money than it budgeted, and your children’s education is in danger,” might effect some of the necessary changes in attitude without exporting the determination of priorities to those cubicles in RIDE’s Providence office.

But spurring the people to action and to a more active engagement in our democracy does not appear to be high on the list of changes that our ruling class believes will help to turn the state around. After all, if voters get involved, they may decide to start batting around the most cherished advantages of Rhode Island’s insiders.

I see, communities screw up and then other communities have to help foot the bill. Do I have to start going to the school committee and town council meetings of every municipality in the state in order to avoid stupidity from affecting my wallet?

Righting Rhody

Only until the puppets of, and members of organized labor are voted out. Join the reform movement and get involved if you are not already, motivate others and work to encourage/recruit candidates that aren't public sector employees and union heads as are most of the Democrats on Smith Hill AND say your prayers. Maybe the independents and a decent percentage of the Democrats will wake up and say enough is enough. If not, come November, the answer may continue to be yes.

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